Friday, June 26, 2009

Deciphering Words of a (Campaigning) Bloomberg on Atlantic Yards: “Enough Already” Means, “Bruce, We Have Another $180 Million Plus To Give You!

(Image from Brooklyn Paper story. Click to enlarge)

It says a lot about the unpopularity of Atlantic Yards that, even though Bloomberg has a seeming lock on a third term as mayor (given his extraordinary ability to spend on his campaign, mobilizing perhaps a half billion toward that end), Bloomberg still deems it politically prudent to disguise and downplay his support for Atlantic Yards.

Ergo, the mayor has basically been dishonest. Case in point? We offer to decipher Mr. Bloomberg’s words. Just weeks ago Bloomberg told the press it was time to turn off the spigot and that no additional public funds should be poured into Forest City Ratner’s Atlantic Yards. What did Bloomberg really mean? He meant that he was about to ram through a deal to give his friend Bruce Ratner more than another $180 million out of the public till.

On Wednesday, May 20th the mayor reportedly “dashed Ratner’s hopes for more” money than the “$230 million for infrastructure and land-acquisition costs” the city is putting up for the project. (See: May 21, 2009, Bloomy to Bruce: Enough already, by Mike McLaughlin, The Brooklyn Paper.) This is actually, a typical understatement of the acknowledged cost to the public of the proposed Atlantic Yards. Its true total cost needs to be calculated in terms of billions.About how there should be no more public spending, the paper goes on to quote the mayor as follows:

“We’ve done everything,” he said in response to a reporter’s question at his daily availability on Wednesday. “We’re going to have a tough time balancing our budget.”

The mayor did add that the city needs the project, but said, “We’re not putting money in. We’re going to invest our money in better schools and in safer streets and in better parks and everything else.”

That was May 20th. On May 29th it was revealed that a deal was in the works to give millions more, what turns out to be more than $180 million more, to Ratner. That day at hearings on the Atlantic Yards held by State Senator Bill Perkins it was disclosed that there was a deal proposed for substantial additional giveaways to Ratner. Seth Pinsky, president of the New York City Economic Development Corporation (who works for Bloomberg) participated in presenting the parameters of the package of handouts to Ratner and it was announced then that the MTA’s board would be addressing the handouts at its June 24, 2009 meeting. Indeed, that meeting where the MTA, in fact, did approve the handouts occured this past Wednesday, just as then disclosed.

Consistent with what was indicated on May 29th, the MTA at that Wednesday meeting approved the more than $180 million in giveaways for Ratner (without any corresponding givebacks, quid pro quos or return obligations from Ratner. In fact, the MTA went so far as to relieve Ratner of obligations to build anything other than the arena and extended to Ratner a low-cost, very long-term option on developing the rest of- the bulk of- the site. That is a blight-inducing (not blight-preventing) decision on the MTA’s part.

At the MTA board meeting this week, Mark Page, director of the city Office of Management, and Budget, a mayoral appointee to board working for Bloomberg, did a lot of the heavy lifting to justify the MTA’s approval of the costly sweeteners for Ratner.

Mr. Page is in charge of balancing the budget for the city. As quoted above, the mayor had said no more money was to go to Ratner because, "We're going to have a tough time balancing our budget." Does it somehow make it OK that the $180 million plus in additional funds is going to Ratner from the MTA rather than out of the city’s own coffers? That would be to presume that the city, state and MTA budgets are all separate, which they are not. Or might presume that the MTA and state budgets are balanced, which they are not. . .

. . . The MTA board was dealing with another (also contentious) matter this week, which was indicative of just how problematic the MTA’s and the state’s inability to balance their budgets has become. The MTA is having to issue RANs or “Revenue Anticipation Notes,” short-term obligations to provide funds missing from its budget. Those notes will be issued at an extraordinary cost to the MTA, a $4-5 million state bond fee, underwriting and other substantial transaction costs, just because the MTA can’t balance its budget. And one reason the MTA can’t balance its budget is that the state can’t pay funds to the MTA which the state is supposed to and which the MTA is awaiting. That is because the state can’t balance its budget.

So you see, these things are all interrelated: There is no free lunch when it comes to picking the pocket of public agencies. And here is one more thing we offer you as interrelated: When Bloomberg said `enough already, we are in hard economic times and there should be no more money given to Bruce Ratner,’ what he really meant was that he had a deal in the works to give Mr. Ratner a huge stack of additional giveaways but that he didn’t want the public to know he was giving an even bigger pile of money to a boondoggle project the public doesn’t like.

About Me

NOTICING NEW YORK & NATIONAL NOTICE are both independent entities managed by Michael D. D. White of Hop-Skip Enterprises. Michael D. D. White is an attorney, urban planner and former government public finance and development official. *** Noticing New York covers New York development and associated politics. National Notice covers national policy and economic issues *** Contact: MichaelDDWhite(at)gmail.com